When I worked at eBay, we had a bonus program based on company revenue. It was around 6% of your salary max and managers got around 25% max based on the same formula. For the first few years, you could count on getting a max bonus every quarter. To the point where most everyone who worked there had always gotten one.
And the one quarter, we didn't get the max bonus. In fact, I don't think we got it all. People screamed and yelled and were pissed. At the company all hands they spent a lot of time explaining that bonuses weren't guaranteed. Some of the lower paid folks were actually crying about not making critical payments because they counted on the bonus. Morale went way down. People left because of it.
Stories like this are one of the stated reasons Netflix doesn't do things like bonuses or any sort of variable comp. Because once you get one once, you feel entitled to it in the future, and it feels like a loss when you don't get it.
And the one quarter, we didn't get the max bonus. In fact, I don't think we got it all. People screamed and yelled and were pissed. At the company all hands they spent a lot of time explaining that bonuses weren't guaranteed. Some of the lower paid folks were actually crying about not making critical payments because they counted on the bonus. Morale went way down. People left because of it.
Stories like this are one of the stated reasons Netflix doesn't do things like bonuses or any sort of variable comp. Because once you get one once, you feel entitled to it in the future, and it feels like a loss when you don't get it.